Dr Salman made stock market a safe haven for fraud gurus

ISLAMABAD Since former advisor finance, DrSalman Shah allowed main culprits of the 2005 stock market crash of nearly a trillion rupees to escape, the stock market has become a safe haven for fraudulent players. Therefore, certain brokers, who requested not to be named, have urged the Government to reopen the investigations into the mega scam wherein Dr Shah was on record saying that at least $12 billion (Rs 669 billion as per the then exchange rate) went into the drain without a trace. Former chairman of the Securities and Exchange Commission of Pakistan (SECP), Dr Tariq Hassan had issued a 'white paper on the March 2005 stock exchange crash, and claimed he had reached close to a 'few big fish when he was shown the door. He in so many words had blamed that the then advisor to the prime minister, Dr Shah left no stone unturned in protecting the culprits. The last orders on my table, when I was removed from my post on Eid day, was the appointment of forensic investigators to probe the few big brokers held responsible by the taskforce, Hassan had stated in his white paper that he had presented before then National Assemblys Standing Committee on Finance and Revenue. Dr Hassans successor Razi-ur-Rehman did the job well for Dr Shah and kept the issue on the backburner for a year or so and afterward hired an American firm called diligence for forensic investigations into the scam. Not only that the American investigators cost nearly a couple of millions dollars to the national exchequer but also gave a clean chit to the big brokers that the taskforce under Justice (Retd) Saleem Akhtar had held responsible for the crash. In a way the heavyweight manipulators were given license to plunder the small investors. That is why perhaps the frauds and defaults have become again a routine at the bourses well before the countrys capital market could recover to its once lost esteem. On Monday, the investors affected of latest fraud to the tune of Rs 1 billion by a company named Eastern Exchange Limited of the Karachi Stock Exchange protested in front of the National Press Club. They appealed to the Chief Justice Iftikhar Muhammad Chaudhry to take suo moto notice of this scam that had affected at least 1700 investors. They alleged that incumbent Chairman of the SECP, Salman Sheikh was also involved in this scam. That is why they urged the Government put names of Directors of KSE and Chairman SECP on the Exit Control List. Meanwhile, in different stock market fraud cases, the SECP has filed a criminal complaint in the competent court against Capital One Equities Limited, ex-member Karachi Stock Exchange (KSE) along with its directors, officers and persons involved in non-transfer of shares/funds. The violations by Capital One Equities Limited also include unauthorised pledges of clients shares and other prohibitive activities. The SECP filed the suit under the Section 24(2) of Central Depositories Act, 1997 as well as offences under relevant provisions of Pakistan Penal Code. The court vides order dated May 13, 2010 issued warrants of all the accused persons, officials of the commission stated on Monday.